GATEWAY BANK AND TRUST CO
October 9, 2004
Mr. Robert E. Feldman, Executive Secretary
Attention: Comments/Legal ESS
Federal Deposit Insurance Corporation
550 17th Street, NW
Washington, DC 20429
Re: RIN Number 3064-AC50
Proposed Threshold Increase for Small Bank CRA Streamlined Examination
Dear Mr. Feldman:
As Chairman, President and CEO of Gateway Bank and Trust Co., a
community bank serving northeastern North Carolina and southeastern
Virginia, I am writing in support of the FDIC’s proposal to raise the
threshold for the streamlined small bank CRA examination to $1 billion.
Though my institution is currently regulated by the Federal Reserve, the
FDIC’s proposal represents the logical course all of the banking
regulatory bodies should follow, including the FRB.
This proposal will have an immediate and positive impact on many
small banks by greatly reducing the regulatory burdens imposed under the
current regulation. Increasing the size of banks eligible for the
streamlined CRA examination in no way relieves banks from CRA
responsibilities. Contrary to what many commenters suggest, all banks,
including my own, still must meet the credit needs of our communities
and be evaluated by our respective regulators.
The FDIC’s “forward-thinking” proposal will also lower my Bank’s
current regulatory burden. The actual costs of time and money to Gateway
Bank are incalculable; however, both are better reinvested in areas that
truly benefit our customers and communities.
I further support the addition of a community development standard to
the small bank examination for larger community banks. However, I
strongly believe that this should apply only to community banks greater
than $500 million up to $1 billion. FDIC staff is aware that it has been
difficult for small banks, especially those in rural areas, to find
appropriate CRA qualified investments in their own communities. Many
small banks must rely on regional or statewide investments that are
unlikely to benefit their own communities. This was not the intent of
Congress when they enacted the Community Reinvestment Act.
Additionally I support the FDIC’s community development standard
because it will provide a more graduated transition to the large bank
examination. This is a significant improvement over the current
regulation. When a small bank reaches the $250 million threshold, it
must completely reorganize its CRA program and begin a sizeable new
reporting, monitoring, and investment program. If the FDIC adopts its
proposal, a state nonmember bank would advance from the small bank
examination to an expanded examination, yet still streamlined. The FDIC
proposal adds the flexibility to mix community development loans,
services, and investments to meet the new standard.
In closing, I support the FDIC’s proposal to change the definition of
“community development” to encompass a broader range of activities in
rural areas. By including rural areas rather than focusing only on low-
and moderate-income areas, the change will eliminate many of the
distortions in the current regulation.
Sincerely,
D. Ben Berry
cc: The Honorable Alan Greenspan
Chairman, Board of Governors-Federal Reserve System
